Yahoo executives feel "horrible" about political arrests of Internet users in China but believe it's better to operate in that market and cooperate with authorities than not be there at all, Yahoo co-founder Jerry Yang said Wednesday.

"It is more important for us to participate, not only for economic reasons, but to be able to" help shape where the industry is going, Yang said during a question-and-answer session at the Thomas Weisel Partners Internet and Telecom Conference in San Francisco.

"You have to balance the risk of not participating," he said. "And people don't realize that being in the market every day there, and being on the ground, we are seeing changes, on the whole, for the positive."

The arrests "are never things you go home and feel good about," Yang said. "We feel horrible about that...We have no way of preventing that beforehand....If you want to do business there you have to comply."

Later in the day, during a question-and-answer session at the JMP Securities Research Conference, he reiterated many of the same statements and added that Yahoo executives have raised the issue with the Chinese government. "We feel the government needs to work on it as a trade issue."

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Yahoo co-founder Jerry Yang discusses other companies' roles in China, and where there's more potential in the global market.
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Internet companies have to deal with regulations that affect their business in other countries as well, even in the U.S., which has the Patriot Act, he said. "There is no 100 percent clean, no matter what country you're talking about."

The Internet search market in China is led by "the usual suspects"--Yahoo, Google and Baidu, followed by 30 to 40 start-ups, according to Yang. Yahoo also is the largest shareholder of Chinese e-commerce site Alibaba.com. "Microsoft is investing heavily in China," he said at the Thomas Weisel conference. "They're not in the market today yet, but I think they will be very soon."

"The search space in China...both in terms of traffic and advertising, is still very, very small compared to the rest of the world," he said.

It will be interesting to see how the Chinese authorities react when the 110 million Internet users there start building home pages and blogs as the social media phenomenon starts to take off, he said.

Asked to define what type of company Yahoo is--media or technology--Yang said it was both. We're "clearly positioning ourselves as a broader Internet services company," he said. "We are much more of a mediacentric model....We've always emphasized that Yahoo can be the more human driven Internet service. That has always been the goal."

In the U.S., Yahoo is moving into the area of social search--enabling users, experts and "influencers" to guide relevancy, he said.

However, the No. 1 priority remains advertising. "Fortune 1,000 marketers are realizing that the audience they want to reach is on the Internet," he said. "We need to be a lot better. (Yahoo) will push hard on improving functionality with our search advertising and network advertising on a performance basis."

Yahoo is also offering users the ability to get to the information they want, whether it be e-mail, instant messaging or photos, on the PC desktop, the TV set-top box or mobile phones, without using a browser, he said. The company announced Yahoo Go Mobile, Go TV and Go Desktop at the Consumer Electronics Show in January.

"It's a huge opportunity for Yahoo to be closer to our user base without them having to fire up a browser," Yang said.

Overall competition among the search and portal players has gotten more intense as the opportunity for online advertising revenues has grown, he said.

"When you have that much growth potential, you'll have competitive dynamics," Yang said. That is what "gets our juices going."

"We feel horrible about that...We have no way of preventing that beforehand....If you want to do business there you have to comply," says Jerry Yang. Yes, but that begs the question of why you want to do business there.

Surely, the appropriate response to repressive governments is to impose trade sanctions on them in an effort to force them to change their ways. I mean, that's what we did to Iraq, North Korea and Cuba and are about to do to Iran. In the case of Iraq, we were prepared to let over a million Iraqi children die of preventable diseases rather than compromise our principles. The Chinese government has treated its people far worse than Saddam ever did (and over a far longer period). If we are morally outraged about the behaviour of foreign governments, surely we shouldn't want to have anything to do with them.

So what's different about China? Big bucks, that's what. All the talk about "making things better" over the long term is just eyewash. Yahoo!, Microsoft and the rest of them are in China to make money, and will do whatever they're told to do so they can keep riding the gravy train. Corporations only exist to make money, and pretending they're about anything else is pure fantasy. Therefore, we can't let corporations set foreign policy.

While Jerry Yang's stance is the pragmatic response of a business manager, it is not a moral stance. At best, it is amoral, at worst, he is collaborating in state repression.

"We feel horrible about that...We have no way of preventing that beforehand....If you want to do business there you have to comply," says Jerry Yang. Yes, but that begs the question of why you want to do business there.

Surely, the appropriate response to repressive governments is to impose trade sanctions on them in an effort to force them to change their ways. I mean, that's what we did to Iraq, North Korea and Cuba and are about to do to Iran. In the case of Iraq, we were prepared to let over a million Iraqi children die of preventable diseases rather than compromise our principles. The Chinese government has treated its people far worse than Saddam ever did (and over a far longer period). If we are morally outraged about the behaviour of foreign governments, surely we shouldn't want to have anything to do with them.

So what's different about China? Big bucks, that's what. All the talk about "making things better" over the long term is just eyewash. Yahoo!, Microsoft and the rest of them are in China to make money, and will do whatever they're told to do so they can keep riding the gravy train. Corporations only exist to make money, and pretending they're about anything else is pure fantasy. Therefore, we can't let corporations set foreign policy.

While Jerry Yang's stance is the pragmatic response of a business manager, it is not a moral stance. At best, it is amoral, at worst, he is collaborating in state repression.

Unless a legal document passes hands in China, a person is safe from police search. So goes the Chinese Constitution:Article 5. The state upholds the uniformity and dignity of the socialist legal system. No law or administrative or local rules and regulations shall contravene the constitution. All state organs, the armed forces, all political parties and public organizations and all enterprises and undertakings must abide by the Constitution and the law. All acts in violation of the Constitution and the law must be investigated. No organization or individual may enjoy the privilege of being above the Constitution and the law.================================================Last sentence says NO ONE Is above the Constitution and law. A call from the police or visit by an "official" DOES NOT constitutes a legal request for an IP address or user name.Don't pander to us about following the local law, when it's clearly trampled all the time by the PARTY. They are clearly above the LAW and CONSTITUTION! You just want to money over life or liberty of your users in China <b>Article 35. Citizens of the People's Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.</b>

Seems similar to US constitution except placement.

Would you turnover a persons user data by a phone call or visit by an official of the US govt. without a warrent signed by a judge?Leave China if you can't abide by her own law. You don't need Chinese blood money that badly, Do you?

Leeflang: you might want to educate yourself on Yahoo's business dealings in China before you pop off like that. And another thing, I work with people who work with Jerry Yang and I know he's a really down to earth nice guy.

"Yang may wish Yahoo could do more in China. However, his company no longer has much influence in the country. In 2005, Yahoo merged its Chinese operations into Alibaba Group, a Chinese company that runs the e-commerce sites Alibaba.com and Taobao.com, paying $1 billion for a nearly 40% stake in the parent company.

Coincidentally, Alibaba.com held an initial public offering [http://BusinessWeek.com, 11/6/07|http://BusinessWeek.com, 11/6/07] of stock on the Hong Kong Stock Exchange on Nov. 6, the same day Yang will will be testifying before Congress. While the parent company will retain a majority interest in Alibaba.com after the IPO, Yahoo's sizable stake isn't big enough to control the Chinese site's policies. And the CEO of Alibaba.com and its parent has already asserted publicly that he plans to cooperate with Chinese authorities."

Yahoo merged it's operations in China with other company (Alibaba and Taobao). They are operating basically autonomously, like a local entity. Also, their stake in the newly formed merger isn't that great, so they don't hold enough clout to change the policy.

Furthermore, we're talking about the Chinese government here. As in, "we have no problems running over our own citizens with tanks and we don't care about human rights" type of government. They didn't need those emails to send that guy up the river. They could have come up with any number of excuses, that's the way they operate. Yang's getting caught up in all the crossfire. It's unfortunate for him cause he's a really good guy.

There's nothing Yang can do now except join the coalition against China's crappy human rights stance. IMO neither Yang nor Yahoo had anything to do with Shi Tao's imprisonment.

Unless a legal document passes hands in China, a person is safe from police search. So goes the Chinese Constitution:Article 5. The state upholds the uniformity and dignity of the socialist legal system. No law or administrative or local rules and regulations shall contravene the constitution. All state organs, the armed forces, all political parties and public organizations and all enterprises and undertakings must abide by the Constitution and the law. All acts in violation of the Constitution and the law must be investigated. No organization or individual may enjoy the privilege of being above the Constitution and the law.================================================Last sentence says NO ONE Is above the Constitution and law. A call from the police or visit by an "official" DOES NOT constitutes a legal request for an IP address or user name.Don't pander to us about following the local law, when it's clearly trampled all the time by the PARTY. They are clearly above the LAW and CONSTITUTION! You just want to money over life or liberty of your users in China <b>Article 35. Citizens of the People's Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.</b>

Seems similar to US constitution except placement.

Would you turnover a persons user data by a phone call or visit by an official of the US govt. without a warrent signed by a judge?Leave China if you can't abide by her own law. You don't need Chinese blood money that badly, Do you?

Leeflang: you might want to educate yourself on Yahoo's business dealings in China before you pop off like that. And another thing, I work with people who work with Jerry Yang and I know he's a really down to earth nice guy.

"Yang may wish Yahoo could do more in China. However, his company no longer has much influence in the country. In 2005, Yahoo merged its Chinese operations into Alibaba Group, a Chinese company that runs the e-commerce sites Alibaba.com and Taobao.com, paying $1 billion for a nearly 40% stake in the parent company.

Coincidentally, Alibaba.com held an initial public offering [http://BusinessWeek.com, 11/6/07|http://BusinessWeek.com, 11/6/07] of stock on the Hong Kong Stock Exchange on Nov. 6, the same day Yang will will be testifying before Congress. While the parent company will retain a majority interest in Alibaba.com after the IPO, Yahoo's sizable stake isn't big enough to control the Chinese site's policies. And the CEO of Alibaba.com and its parent has already asserted publicly that he plans to cooperate with Chinese authorities."

Yahoo merged it's operations in China with other company (Alibaba and Taobao). They are operating basically autonomously, like a local entity. Also, their stake in the newly formed merger isn't that great, so they don't hold enough clout to change the policy.

Furthermore, we're talking about the Chinese government here. As in, "we have no problems running over our own citizens with tanks and we don't care about human rights" type of government. They didn't need those emails to send that guy up the river. They could have come up with any number of excuses, that's the way they operate. Yang's getting caught up in all the crossfire. It's unfortunate for him cause he's a really good guy.

There's nothing Yang can do now except join the coalition against China's crappy human rights stance. IMO neither Yang nor Yahoo had anything to do with Shi Tao's imprisonment.

People who don't have a clue as to the sacrifices made by others in order so that they could have freedom of expression.

A freedom they gleefully help the other governments deny others.

I think I am paraphrasing, but do we live in a generation that has no future and deserves none?

Absolute power corrupts absolutely, the U.S. and China are bound to have a bad fight over human rights, we need to be united in our resolve to help preserve freedom of speech in China.

Not to hurt the Chinese government, but to help it shine a light on it's own deficience, and prevent kind of Nazi fanaticism that can occur when people are brainwashed into thinking their government is infallable.

People who don't have a clue as to the sacrifices made by others in order so that they could have freedom of expression.

A freedom they gleefully help the other governments deny others.

I think I am paraphrasing, but do we live in a generation that has no future and deserves none?

Absolute power corrupts absolutely, the U.S. and China are bound to have a bad fight over human rights, we need to be united in our resolve to help preserve freedom of speech in China.

Not to hurt the Chinese government, but to help it shine a light on it's own deficience, and prevent kind of Nazi fanaticism that can occur when people are brainwashed into thinking their government is infallable.

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